What is Angel Investing?

"An angel is a high net-worth individual who invests his or her own money in start-up companies in exchange for an equity share of the businesses. ACA recommends that entrepreneurs work with investors who are accredited investors (who meet requirements of the Securities and Exchange Commission) and who can add value to the company via high quality mentoring and advice. Other important things to know about angels include:

Many angels are former entrepreneurs themselves.

They make investments in order to gain a return on their money, to participate in the entrepreneurial process, and often to give back to their communities by catalyzing economic growth.

Angels make a return on their investment when the entrepreneur successfully grows the business and exits it, generally through a sale or merger.

The Center for Venture Research estimates that U.S. angel investors invested $24.1 billion in about 73,000 small businesses in 2014. Many of the investments were in start-up or very early-stage companies.

Angels tend to invest in companies that are located near them regionally (or to co-invest in a wider geography if a local investor they know and trust is involved)."

INVESTOR IQ

As an investor in startups or an entrepreneur seeking investments, understanding the investment process can increase your ability to be successful. In either role, you can play a critical role in the entrepreneurial ecosystem that has made this nation—and many other nations—more prosperous. You have probably heard about the risks of investing—that the vast majority of startups go out of business, leaving a lot of investors high and dry. The Kauffman Foundation, the Angel Capital Association, and the Angel Resource Institute designed this course to reflect everything they have learned from watching thousands of angel investors succeed and fail over the last fifteen years. They’ve broken down everything They’ve learned into five basic questions you have to know the answers to before making or seeking your first investment.

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Trends in Angel Investing

2015 ANNUAL ARI HALO REPORT

Portland, OR (March 9, 2016) – The Angel Resource Institute at Willamette University (ARI) released the 2015 Annual ARI Halo Report today, a national survey of angel group investment activity sponsored by PitchBook. Vice Chairman of Research Rob Wiltbank, PhD unveiled the annual review at a special Q&A luncheon at Pitchbook Headquarters in Seattle this morning. “We have seen both round size and valuations continue to grow in 2015, though angels will be glad to note that the percentage of investor ownership has remained relatively stable over the past four years. We are excited to continue tracking these trends through 2016 to see if this growth continues.”

Additional Resources

RECOMMENDED READING:

ANGEL INVESTING

Written by David S. Rose, the founder of Gust—the global platform that powers the world of organized professional angel investing—Angel Investing is a comprehensive, entertaining guide that walks readers through every step of the way to becoming a successful angel investor. It is illustrated with stories from among the 90+ companies in which David has invested during a 25 year career as one of the world’s most active business angels and includes instructions on how to get started, how to find and evaluate opportunities, and how to pursue and structure investments to maximize your returns.